I recently bought a house at the trustee sale. I failed to negotiate the CFK agreement with the previous owner and started the eviction process with the help from an eviction service company. To my surprise, the previous owner answered. They claim that I am not the true owner of the Property. The reason they gave is that the Trustee failed to provide the “chain of title”, saying that Trustee (of the sale) violated RESPA and didn’t notify them about the pending sale. They also claim that the note was transferred to multiple parties and I (Plaintiff) cannot specify the actual parties to whom the note was transferred to.
I don’t know whether there is any base to their claim. As far as I can tell, I’ve followed all the advices I can find here, such as when to record the title etc. The eviction service company also told me that this was the first time they have seen such a claim that uses such claim.
What’s the chance of my wining this case? It seems to me that if I lose this case, all trustee sale buyers would be burdened with the responsibility to figure out the whether the lender that the trustee represents truly has the Notes with them. (Yeah, I have seen the Florida case where a foreclosed property owner got away with a free and clear house because the lender failed to produce the Notes.)
Any suggestions? Experiences?
I think the key issue here is that the question of whether or not the trustee’s deed is valid is not a question for the court hearing your unlawful detainer case. Instead if the prior owner wants to challenge your ownership I believe they have to do so through a quiet title action, and as part of that action they would then need to request injunctive relief against your unlawful detainer action. Neither of which it sounds like they’ve done, so my guess is you are ok.
Further, since it does not sound like they have claimed that you had unclean hands in the purchase of the property, I believe the judge should find that you are entitled to the property as a bonafide purchaser for value (a BFP), and that as such the prior owner has no claim against you (or the property at this point), but only the lender.
Just keep in mind that I’m not an attorney, so this is just my opinion, not advice. The only advice I will give is to find a really good attorney to see your case the rest of the way through.
Thank you so much for your reply - it makes a lot of sense to me.
Yes, I’ve asked the eviction company for attorney help and their in house attorney will take this case.
I’ll report back how it went.
I have had good and bad luck with the “in-house” attorneys eviction companies use. While I think you are ok, I’d really make sure their attorney knows foreclosures. For example he should know that so long as a trustees deed is recorded within 15 days it is effective as of 8am the day of sale.
Does anyone have a referral for an attorney w/ experience in handling these types of cases. I know several decent eviction attorneys, but I now have a case of a former owner claiming they have a loan mod signed by the bank. We are just are just starting the legal process, but my suspicion is this is going to be different than an eviction case since there may be some truth to their claim.
Thanks for any help!
Definitely find an attorney, but in the mean time ask the homeonwer for a copy of the loan mod agreement and offer to help them overturn the sale if their claim is true. Then call the trustee and ask them to return your funds because the sale is invalid. If the trustee has both the buyer at auction and the homeowner calling saying that there is a problem they will likely get you a pretty quick answer. If they still say the sale is good, then let them lead the fight as they would then have liability to you if it turns out the homeowner wins since they refused to return your money.
Just to report back:
Sean is absolutely right. The claim from the previous owner has no basis. The eviction service company (Fullcount service) did screw me up a little - the serving proof of the 3 day notice had the wrong address so I couldn’t show it to the judge on our first scheduled trial. We asked for a continue and went back to court the next week. This time the previous owner also got an attorney. Finally we settled - I let them stay another month for free, and they promised to keep the house in good condition. Of course, the best part is that there is no cloud on the title anymore and writ is issued so I can get the sheriff to do the eviction right away if they don’t move out by that day.
Great to hear, congrats!! You definitely earned some stripes on that one.